ISLAMABAD — The United States Agency for International Development (USAID) has agreed to help improve Pakistan's competitiveness aimed at increasing its exports. In this behalf USAID and Pakistan will conduct a number of studies on the global competitiveness of selected economic sectors and a first step the growing motorcycle industry of Pakistan has been selected for carrying out a policy analysis.

The Competitiveness Support Fund (CSF), a joint venture of the Government of Pakistan, Ministry of Finance and the US Agency for International Development (USAID) will examine where competitiveness already exists within targeted sectors and where it can be improved.

According to an official announcement, CSF will use the studies to forward recommendations to the government of Pakistan on policy interventions it should take to make certain sectors more internationally competitive.

The first sector selected by CSF is the growing motorcycle industry in Pakistan. Other analyses will follow on the automotive and food processing sectors. Motorcycle Industry estimates show that last year a total of over 700,000 motor cycles were produced in the country. The industry has been experiencing a healthy growth rate of around 30 per cent per year for the past 4-5 years. It is estimated that production will cross the million units mark by 2008.

To identify the prospects and problems/obstacles of the motorcycle industry, a high-level delegation from CSF recently visited Karachi and met the key stakeholders. A follow-up visit is scheduled for the first week of September to Lahore for an interaction with the stakeholders there as well.

Presently there are 43 motorcycle assemblers in the country that have been licensed by the Engineering Development Board (EDB). Out of these, there are 3 Japanese assemblers (Honda, Yamaha and Suzuki), while the remaining 40 assemble Chinese motorcycles. These assemblers buy parts, sub-assemblies and

assemblies from over 200 large, medium and small vendors located in Karachi and Lahore. It is estimated that the motorcycle industry employs more then 200,000 people directly and indirectly.

There are a number of government agencies that are involved in regulating, controlling and monitoring the motorcycle industry. These include the Engineering Development Board (EDB), the Pakistan Standards and Quality Control Authority (PSQCA), the Ministry of Industries & Production (MOIP) and the Central Board of Revenue (CBR).

The primary objective of this study is to carry out a policy analysis of the competitive advantage of the local motorcycle industry, along with identification of the problems being faced by the sector. It will use its findings to recommend solutions at the policy and programme level on how to strengthen the supply chains and improve the value chains of this industry.